The Keyhole makes observations about consumers, brands, ads, & marketing, through a predictive customer loyalty lens. Most marketing is ineffective to today's bionic consumer, given undifferentiated products, loss of "brandness," & hard to come by profits. Marketers talk about "engagement" but nobody seems to be doing a very good job measuring or integrating it into what they do & it shows! The Keyhole opens a dialogue on this subject & suggests real-world solutions with the marketing community.

Wednesday, October 30, 2013

It was Mark Twain who noted that names are not always what
they seem. Take AT&T, for example, the acronym for the “American Telephone
& Telegraph” company, although we’re not so sure whether many consumers
actually remember that. Partially because they’ve used “AT&T” for a long,
long time, but mostly because telegraph via wires disappeared in the very early
20th century thanks to Marconi, and traditional telephones gave way to
cellphones and smartphones, thanks to Motorola in the early 1970’s.

But today – given consumer trends – the AT&T acronym
would be better translated as “American Telephone & Tablet” company,
because according to reports of 3rd Quarter growth, consumers buying data plans
to support tablets are fueling AT&T’s net subscriber growth, which is good
news. But from a bottom-line basis, consumers who just buy data plans bring in
less revenue, which is not such good news.

The trend has been reflected in what drives the Wireless
Carrier category. According to our Customer Loyalty Engagement Index, the
category that was once driven by “Brand Reputation and Technological
Leadership” has shifted to “Equipment,” with tablets at the top of the list of
technology consumers crave most. And “A Selection of Calling Plans” has changed
to “Data Options,” including elements like daily data options for tablets and
lower-data plans for smartphones. What hasn't changed are consumer desires for
“Larger/Faster/Uninterrupted Networks” and “Customer Service.”

As this is technology we’re talking about, it’s not
surprising to find that consumers have very high expectations regarding
delivery on these drivers, but particularly when it comes to “Data Options.” If
we calculate the consumer Ideal at 100%, here’s how the wireless carriers’ own
customers currently evaluate the major brands in meeting their expectations:

Verizon Wireless 89%

AT&T Wireless 83%

Sprint 80%

T-Mobile 79%

While AT&T added more contract customers than it lost,
most were for tablets. To combat that shift, they’ve added a range of plans for
smartphones; $40.00 for 450 minutes of voice calling plus added costs for data
usage and texts, upwards of $100.00 for 2 gigabytes of data, plus unlimited
calling and texting. But as consumers can get 3 gigabytes of data for their
tablets, as low as $30.00 a month, you don’t need a calculator app on your
tablet to do that math and see what is (and isn’t) more lucrative for the
carrier.

It was technology columnist, Walt Mossberg, who said, “After
spending hours with it (the iPad), I believe this beautiful new touch-screen
device has the potential to change portable computing profoundly, and to
challenge the primacy of the laptop.”

And apparently the primacy of contract calling customers for
wireless carriers, too.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, October 24, 2013

Here’s our mantra: You need to know what people think, not
what they say they think.

And, not so much a mantra as a universal truth – commodities
notwithstanding – consumers may say they want “cheap,” but that’s usually not what
they really expect. Oh, sure, they want to pay a little as possible, but it’s
not the way they’ll actually behave when they get around to factoring in what
they really expect. The “cheap” part is the rational aspect of decision making,
but the expectations part is mostly emotional, and it’s a really good idea to
have a fix on those expectations before creating products and taking them to
market, because relying only on what people say, can take you down the wrong
highway.

For example, four years ago we wrote about the Nano, from
India’s Tata Motors. It sold for under $1,800.00. No, not a typo, it was priced
to drive off the lot at just under eighteen hundred dollars! Sure, this was the
Indian market, but it was conceived as the people’s car. Small, economical, and
because the target audience said they’d buy such a car if it was “cheap.” And it
was. Cheap, I mean. In lots of ways. Low sticker price, sure. But the car, too.
It had a tiny, 0.6-liter engine with only 33 horsepower. The front and rear
bumpers were plastic and most of the construction was glued, not welded. Seats
couldn’t be adjusted. It had only one side mirror and windshield wiper,
hand-cranked windows, a manual transmission and no airbags, hubcaps, or radio.
And no AC. It didn’t even have a glove compartment. Sure the engine sometimes
sounded like a broken lawnmower, but the Nano got 50 miles to the gallon, so
what’s to complain about? Basic car? Sure. Cheap? For sure.

OK, back to the say-versus-think paradigm. Automotive brand success – all brand
success, for that matter – is based upon how well a brand meets or exceeds
customer expectations for the category Ideal. Expectations will vary by
category and demography and geography, to be sure, but most of those
expectations are emotionally-driven (no pun intended), many of which go
unarticulated. And brands that are able to meet real expectation always do
better in the marketplace. But, since folks said they would buy something
cheap, Tata Motors produced a really cheap car and thought it was going to be a
real growth area for them.

But after nearly 5 years, sales ran out of gas. Why? Well,
even though consumers said they wanted “cheap,” there’s cheap (as in price/rational)
and there’s cheap (as in image/emotional), and – as usually happens – emotion
won, and Tata Motors lost. Turns out that consumers really wanted a more
upscale image, expectations for automotive imagery being really high even among
the more price-sensitive consumer segments, and pretty much true around the
world. So Tata is bringing the Nano in for an image tune-up, to move it from
“common” to “cool.”

With that in mind, the new models will have hubcaps. And a Bluetooth-enabled
stereo with four speakers, a more comfortable interior, and chrome trim. Oh,
and a glove compartment. The top-end Nano LX will cost about twice what the
original models cost, so just under $3,600.00. Their new advertising tagline
for the new models? “Celebrate Awesomeness.”

Of course, when it comes to “awesomeness,” you may expect
something else. Which is probably why it’s a good idea to measure what your
target audience really thinks and really expects before you disappoint them – and
your shareholders.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, October 16, 2013

Four years ago, when we were examining leading-indicator
values and expectations of what was the then-nascent “tablet” category, we saw consumer
values dealing with tablets and telecommunications were blending. The result? Tablet
attributes, benefits, and values combining with something that let you make a
call. A little ahead of its time? Sure, but that’s the nice thing about real
loyalty and engagement metrics. They’re leading-indicators, meaning they’re signs
of what’s going to happen down the road.

Anyway, at the time we called the fusion of smartphone and
tablet technologies a “phablet.” OK, not the most creative of titles, but at
that juncture it really didn’t matter what we called them because there weren’t
enough of them to matter, and certainly not enough to measure. But all that
said an amalgam of the two was showing up on the radar. Dell introduced a hybrid back
then they called the “Streak,” but after a year and only a 3% share of market, it
vanished from the market.

Four years later and it’s no surprise to anyone that technology
moves fast, but it sometimes even technology has to decelerate to keep up with
to consumer expectations. Those values we talked about four years ago have created
even more heightened phablet blips on our loyalty-engagement radar screen, according
to our most recent Customer Loyalty Engagement Index. So here we are, back to
the future. And while the “phablet” category is still too new and too small to
track, the way customer expectations are going and technology has been, perhaps
we’ll have those numbers for you sooner rather than later.

Samsung has been introducing larger and larger smartphone
screens, and larger smartphone screens seem extremely popular with consumers.
In the Asia-Pacific market they’ve been reported as outselling tablets. With
that kind of success it can’t be too long before other brands follow. In fact,
the most recent tech rumor is that the Apple iPhone 6 will come very close to
having a 6” display. With these kinds of category reports and brand rumors, questions
abound: Which values will supersede others? Smartphones or tablets? Does size
really matter? Will “phablets” finally become a category unto itself? Will
consumers flock to this new configuration? And, where can I get one?

Three things for sure. First, consumer expectations will
continue to grow, especially when it comes to fusing technologies that have
previously delighted consumers. Second, predictive loyalty and engagement
assessments can help to answer those questions, and quite specifically at the
early stage. And third, you want those answers because it prevents brands
from confusing the art of possibility with the art of profitability.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, October 09, 2013

On the brand front in Shutdown Week #2, the Republican brand
is taking the brunt of voter frustration. The brand’s engagement assessment –
its ability to meet Republican voter expectations for their Ideal Political
Party – got sliced another 5% this week. The Democratic brand was cut another 3%,
according to 450 registered Democrats and 467 registered Republicans (all
non-government workers), using our highly-validated emotional brand engagement
assessment, with the party brands seen this week to uphold the values of their
Ideal as follows:

Democratic Party Brand Republican
Party Brand

10/10/12 83%
77%

10/02/13 76%
65%

10/08/13 73% 60%

The four engagement drivers of the Ideal Political Party
(calculated to be 100%) can best be described as Action, Compassion,
Perception, and Resolve. See previous post for definitions of each. Each group
of registered voters defines what’s important to them via their Ideal.

Democrats see their Ideal Political Party this way. They lost
brand engagement strength in week #2 of the shutdown on the 4th most-important
driver, Action:

Perception

Resolve

Compassion

Action

Republicans, on the other hand, view their Ideal Political
Party differently, which shouldn’t surprise anyone, but they lost more brand
engagement ground this week, and on three drivers: Perception, Action, and
Compassion. They did, however, maintain engagement strength on their 1st
most-important driver, Resolve. Make of that what you will.

Resolve

Perception

Action

Compassion

Speaker John Boehner, who’s been badly panned as the human
embodiment of the Republican brand, has recently adopted a slightly more
conciliatory tone saying, "There's nothing on the table, there's nothing
off the table." But with default looming, no resolution in sight, and most economists opining a default would be cataclysmic; in light of more
Republican brand losses, everything in the world of brands indicates the
Speaker ought to find something to put on the table. And do it quickly because real
brand engagement assessments have been independently validated to provide very
accurate reads as to how consumers will behave in the marketplace.

Because when it comes to maintaining high levels of brand
engagement, whether for pizza or political parties, what consumers and voters
both look for is their brands to deliver.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, October 03, 2013

After
years dealing with financial crises on a last-minute basis, House Republicans
and Senate Democrats couldn't get organized enough to break the politically
charged budget standoff over President Obama’s Affordable Care Act. Unable to
organize an accord, lawmakers allowed the government to shut down. We know how
this will effect government services, but how does the shutdown effect how the
electorate sees the political parties themselves?

We
use a highly validated emotional brand engagement assessment to measure B2B and
B2C brands and we did the same thing for each of the major political parties. The
assessment combines psychological inquiry and higher-order statistical analyses
to “fuse” emotional and rational values, in this case those dealing with how
the electorate sees their Ideal political party. Brand engagement assessments,
whether for pizza or political parties, measures what consumers think – as
opposed to what they say they think, and from a brand perspective provides an
accurate read to how consumers, or in the case of political parties and their
candidates, the electorate, will behave.
We’ve used this model of engagement-ties-closely-to-behavior for every
Presidential election since Bill Clinton ran in 1992 and the metrics have
predicted the winner in every election – except in 2000, where George W. Bush
beat Al Gore. You to be the judge about that one.

When
it comes to Political Parties, four engagement drivers (and attendant
expectation levels voters hold for each of those drivers) define the Ideal. The
order of engagement drivers (and their associated expectations) vary in terms
of what’s important to Democrats and Republicans, hence different party views
and political brand affiliation. The drivers can be briefly described as
follows:

Action:
Does the party have a comprehensive, realistic, well-considered plan for
solving the problems facing the country?

Compassion:
Does the party care about all the people?

Perception:
Does the party have a deep understanding of the problems facing the county?

Resolve:
Does the party have the strength and leadership to guide the country?

Democrats
see their Ideal Political Party as follows:

Perception

Resolve

Compassion

Action

Republicans
view their Ideal Political Party this way:

Resolve

Perception

Action

Compassion

For
Democrats, the driver with the highest expectations is “Compassion.” For
Republicans it’s “Action.” Again, you be the judge about that.

We
took this measure during the 2012 Presidential election, so it provides an
up-to-date benchmark against which to measure how 253 registered Democrats and
267 registered Republicans (all non-government workers) rated how well their
party upheld these values post-government shutdown. The Ideal is calculated to
be 100%, and here’s how things currently stand.

Democratic Party Republican Party

2012 83% 77%

2013 76% 65%

If
you do the math, The Democratic party saw their brand engagement strength
decrease by 7%, the Republicans brand by a bit more, -12%. One brand engagement
certainty we’ve seen play out over the years is something called the “Engagement
Rule of Six,” which states that where brands are stronger than the competition,
consumers are six times more likely to give them the benefit of the doubt in
uncertain circumstances, which is a pretty fair description of a Federal
government shutdown. So the usual finger pointing and political rhetoric
notwithstanding, it’s likely the Democratic brand will come out a bit better
than the Republican brand.

It
was Will Rogers who noted, “I am not a member of any organized political party.
I am a Democrat.” That was 81 years ago, and Democrat or Republican, the
sentiment is worth taking to heart. Because whether a political party or a
consumer brand, if you are so disorganized that you are unable to meet customer
expectations, you always lose in the marketplace. Or, as is likely in this
case, the voting booth.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

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About Us

Robert Passikoff, founder and president of Brand Keys, is a sought-after speaker and global thought leader on engagement and loyalty. He has pioneered work in these areas, creating the Customer Loyalty Engagement Index and the Sports Fan Loyalty Index. New York University’s communication school has declared Dr. Passikoff “the most-quoted brand consultant in the United States.”